Trading Idea - Is Red Hat close to Resistance?

Published on Tuesday, 16 March 2010 07:04 Written by Christopher Lynn

New York, March 16th (TradersHuddle.com) - Shares of Red Hat, Inc. (NYSE:RHT) are trading very close to calculated resistance at $30.90 with the current price action closing at just $30.76 placing the stock near levels that make it difficult to buy.

Red Hat, Inc. (NYSE:RHT) develops and provides open source software and services, including the Red Hat Linux operating system.

Red Hat's current stock range is defined by current calculated support defined at $27.36 and by the resistance level at $30.90, the stock is clearly over-extended from support, making it difficult to establishing new long positions at this level.

Traders don't have a clear entry point for Red Hat, as the stock is well above support, however, as the stock pulls back towards $27.36 it will definitely provide a reference point to establish a trade. On the other hand if the stock decides to break above resistance level at $30.90 then traders will get an opportunity to enter Red Hat stock by establishing a position as the stock moves to a higher range.